This invention generally relates to determining price adjustments for goods and services based on consumer related information. More specifically, embodiments of the invention relate to determining such price adjustments in real time during transactions using a computer network such as the Internet or any other computer network.
The purchase of goods and services over the Internet, or on-line, is becoming very common. Consumers now frequently use the Internet, for example, to buy travel related services such as airline tickets and hotel rooms, and entertainment related services such as tickets to concerts and sporting events. Many other products, from T-shirts to automobiles, are also purchased online, and the expectation is that the use of the Internet for shopping will grow substantially in the near future as more and more consumers get access to the Internet and become more familiar and comfortable with using the Internet.
In on-line sources (e.g. shopping forums, advertisements etc.), the prices for the goods and services may change frequently. This may be due to a number of factors such as current demand for a product, or any kind of price differentiation caused by the producer of a certain good. Prices may also change from day-to-day or from week-to-week as consumer interest changes. In some cases, the process for goods and services may be adjusted in real time—that is, while the consumer is shopping for the goods and services. Presently, two systems, on-line bargaining and an automated price management system, are used to adjust prices in real time in on-line retailing/shopping. An on-line bargaining system is described in Korean patent application no. 200000002175, and an automated price management system is described in U.S. patent application publication no. 2004/0172372.
The online bargaining system has the problem that it confronts both parties with non-negligible transaction costs (costs in a generic sense, not only from the monetary point of view, but also opportunity costs like time etc.); the potential customer's search costs might be lower than the costs for bargaining (so he might prefer searching for another seller rather than bargaining with the known seller). Also, in an on-line bargaining system, the action must be initiated by both parties, the potential seller and the potential customer as well. In this system, the potential seller has no method to verify if one of his potential customers is just a free rider or not; the price adjustment is not based on the potential customer's actual willingness to pay.
An automated price management system is mainly based on a competitor analysis. Such an analysis only allows making price adjustments for certain groups of potential customers, but not for individuals. It does not allow perfect price differentiation. Also, it does not cover the total market, and thus, there are opportunities for some other competitors to undercut prices. Also, this system is just based on content analysis of e.g., retail site sales (or something similar) and assumes that such content is not manipulated while it is transferred through the network. As well, such a system does not allow to circumvent bot protection mechanisms like human interfaces (e.g. embodied through curly numbers etc.). Such bot protection mechanisms are used to prevent automated price management systems from doing a competitor analysis based on web crawling techniques. Many e-commerce applications come with mechanisms that require a human to recognize how to use a key (e.g. curly numbers) to move to the next step in the application (e.g. it is hard for an automated system to detect curly numbers integrated into pictures or video, for the a human it is easy though).